Convicted Hedge Fund Manager Agrees to SEC Industry Bar
Sept. 26, 2019
File Nos. 3-19526
September 26, 2019 - The Securities and Exchange Commission today issued an order barring a self-proclaimed New Jersey hedge fund manager, Nicholas Lattanzio, from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
The SEC previously charged Lattanzio with committing securities and investment advisory fraud. In its complaint filed in federal court in New Jersey in 2015, the SEC alleged that Lattanzio had defrauded two small companies out of more than $4 million by posing as a hedge fund manager who could arrange project financing for them in exchange for an investment in one of his funds. Lattanzio falsely stated that the fund had as much as $800 million under management and a proven track record of producing double-digit returns. As soon as the investors deposited their money into the fund, Lattanzio used the money to fund lavish personal expenses for himself and his family, including a luxury automobile, expensive jewelry, a home in an affluent neighborhood, and private school tuition.
The U.S. Attorney's Office for the District of New Jersey brought parallel criminal charges against Lattanzio. He was convicted at trial on two counts of securities fraud and two counts of wire fraud, and was sentenced to prison and ordered to pay restitution to the victims of his fraud. The SEC's order, to which Lattanzio consented, was issued pursuant to Section 203(f) of the Investment Advisers Act of 1940. The SEC's federal court action against Lattanzio remains pending.
The SEC's investigation was conducted by David Austin and George Stepaniuk of the SEC's New York office, and the litigation is being led by Todd Brody. The case is supervised by Sanjay Wadhwa.
The Commission appreciates the assistance and cooperation of the U.S. Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, and the New Jersey Bureau of Securities within the State Attorney General's Division of Consumer Affairs.